Something Screwy Going On With Silk Market Prosecution

2010-02-12

Everyone knows the notorious Silk Market, Beijing's famous knock-off market that has been held up for years as a haven for IPR infringement. IP owners and foreign governments (particularly the EU in recent years) have repeatedly banged their heads against the wall trying to get the market's retailers to clean up their act.

A year or so ago, a big enforcement effort ended with chaos, with some of the retailers, and their friends, storming the offices of the lead IP agency that was assisting foreign IP owners. What a mess.

New development:

The former general manager of Silk Street market in Beijing will be charged by Chaoyang Procuratorate for permitting the sale of counterfeit products and taking bribes.

Wang Zili was alleged to support retailers selling fake products in the market by investing in their business.

Good deal, right? This guy, who was in charge from 2006 to last summer, was certainly overseeing a heck of a lot of IP infringement.

A former Silk Street vendor named Yang Changjun, who was sentenced to three and a half years in jail by the court on Monday for selling counterfeit bags, claimed Wang used him to sell fake goods.

Yang admitted the charge of selling a large quantity of counterfeit goods, but claimed it was Wang Zili who persuaded him to conduct the business.

Sure. It was all the other guy's fault. Yang is not exactly a neutral witness here. But wait, the blame game gets even better:

[Defense lawyer] Qu said Yang started selling genuine leather goods in Silk Street in 2004 but consistently lost money.

"Wang offered him money and suggested he buy fake products from Guangdong and resell them in the market. Wang also told Yang they could monopolize the fake goods market in Silk Street since he was the general market [sic] at that time," Qu said.

Something's off about all this. So this Yang character is selling genuine leather bags at the Silk Market for a couple years? Well, that's probably bullshit right there.

But then this genius Wang comes along with an innovative idea. Let's sell fake crap using famous trademarks at the Silk Market. What a concept!

Except of course that people have been selling fake crap at the Silk Market for a very long time. It was already going strong when I came to Beijing at the end of '98 and the Silk Market consisted of a bunch of stalls near the U.S. Embassy. The nifty new building looks nicer, but the concept hasn't changed all that much in the last ten years.

Since the Silk Market has been the proverbial IP eyesore in the country for so long despite repeated calls for enforcement, it's been widely believed that it was being protected by someone high up in the government, either Beijing municipal or central government. This of course is something that the authorities would want to avoid getting into, particularly when some obvious fall guys can be used to shut up the critics.

Perhaps Yang is full of shit and is just trying to make himself look like a stupid dupe. It's certainly a possibility. But it also makes me wonder whether the prosecution is also trying to make Wang into some sort of IP infringement mastermind who single-handedly brought fakes to the heretofore pristine Silk Market.

Message: we (the gov't) have prosecuted Wang and have therefore: 1) solved the Silk Market problem; and 2) atoned for the past.

I think this prosecution, if it moves forward, will require close observation.

Tags: China Law, Intellectual Property